Sierra Entertainment, Inc. is a Worldwide American video game developer and publisher founded in 1979 by Ken and Roberta Williams. Based in Los Angeles, California, the company is currently a subsidiary of Activision Blizzard (a subsidiary of Vivendi SA). Sierra itself owns four in-house development studios: High Moon Studios, Massive Entertainment, Radical Entertainment and Swordfish Studios. Sierra is best known today for its multiple lines of seminal graphic adventure games started in the 1980s (notably King's Quest, Space Quest and Quest for Glory), some of which proved influential in the history of video games.
The history of Sierra Entertainment started back in 1979 in the California home of Ken and Roberta Williams. At the time, Ken was working as a contract programmer for IBM, developing an income tax program on a mainframe computer 3,000 miles away from L.A. One night he found a program labeled Adventure on the mainframe. Curious of what it could be, he downloaded it and it turned out to be a copy of Colossal Caves. It was the first true "interactive fiction" computer game and Ken became fascinated with it. Roberta was not very interested in computers at the time, but Ken showed her the game on a terminal he had brought home from work. Roberta, who had been a big fairy tale and adventure fiction lover ever since her childhood, was instantly hooked in this new breed of storytelling and played her way through Colossal Cave with great enthusiasm.
For Christmas 1979, Ken bought a $2,000 Apple II microcomputer with 64k of memory, a 140k floppy disk drive and a monochrome monitor. He was planning to use it to develop a FORTRAN compiler for Apple computers. At the time, a company called Adventure International developed text adventure games for the Apple II. Roberta played their games, but even though she liked them, she was not entirely content with the adventure games that existed at the time. She realized that this medium had the possibilities to do even more than presenting text descriptions on the screen. Since modern computers could display graphics, instead of telling the player “You are standing in front of a house” a picture of the house could be displayed on the screen. The games could use better plots too, making them even more interesting to play.
Roberta sat down in front of the kitchen table and started to write down her ideas. Three weeks later she presented to Ken the script of a computer game called Mystery House, an idea she had developed during the previous days, in between watching the kids (D.J. was seven at the time and Chris was only one year old) and doing other everyday household stuff. The game would revolve around a murder mystery, where you as the player would be trapped overnight in an old house together with seven other people, one of whom would be a killer. But who? The house would also contain a hidden treasure that the player had to find. (Inspiration was taken from the famous Agatha Christie story And Then There Were None and the parlor game Clue.) At first, Ken was not very excited about her idea, but eventually Roberta caught his attention, especially when she said she wanted the game to contain pictures instead of just text.
Roberta managed to talk Ken into helping her develop the game in the evenings after work. Ken figured out a way to fit the amount of graphics she wanted into the very limited memory of their Apple II computer and created the tools needed to draw it, as there still were no drawing programs available on the market. They bought a crude graphics tablet with a mechanic arm that could transfer a drawing on paper to a computer image. Ken also programmed the logic code needed in the game. Roberta worked on the text and the graphics and told Ken how to put it all together to make it the game she wanted. She did the quality assurance of the game herself.
They worked on it for about three months and in May 5, 1980, Mystery House was finally ready for shipment. They placed a small ad in Micro Magazine, made copies of the game themselves and packaged them in small square folders, sealed inside Ziploc bags. The box art was designed by Roberta's mother Nova, who was a good oil painter. The games were then distributed to the only four software stores available in Los Angeles County at the time by Ken and Roberta personally. It cost $24.95 and was distributed under Ken's company name On-Line systems.
With their first computer game done, Ken and Roberta started to make plans for the future. They thought that if they could just write games popular enough to earn them about $40,000 a year, they could move out of Los Angeles in a few years and live in a “log cabin in the woods”, working together at home, making computer games and raising their children in a peaceful and beautiful environment close to nature instead of the big and busy city of L.A. They had no idea that this humble dream would be a heavy understatement to what was actually going to happen to them in the following years.
Mystery House was an instant hit. The graphics, although consisting only of crude line drawings, monochrome and motionless, was something previously unseen in a computer adventure game, and people loved it. The orders were pouring in and so was the money. By August 1980, Mystery House had already sold enough copies to enable Ken and Roberta to move out of L.A. They bought a house in Coarsegold, a small gold mining town in the Sierra Nevada foothills just south of Yosemite National Park, where Roberta's parents John and Nova owned an apple orchard.
Mystery House was the first computer adventure game to have graphics, and as such is considered a classic game and a landmark achievement in computer gaming history. It sold about 15,000 copies and earned $167,000, an unprecedented number for the time. Ken and Roberta who had not anticipated this huge popularity of the game would constantly get telephone calls day and night by people who wanted to buy the game. They realized that suddenly 30–40,000 people had become aware of their home phone number. After about 6 months they moved to the small mountain town of Oakhurst, seven miles north of Coarsegold. Chaos lasted for about three more months in their new home until they rented an office, located on top of a print shop. Their first employee was John Williams, Ken's brother, and the early On-Line systems staff consisted mostly of friends and relatives of the couple.
Next to the adventure games, Sierra On-Line also released a number of very successful arcade games on license, such as Frogger and Jawbreaker. These games were sold under the SierraVision label. A few non-entertainment software products, such as the HomeWord Speller word processor were also released. Ken was working hard during this initial period of the company to gain understanding of the digital entertainment industry so he could lead the company in the right direction. His opinion of computer games had changed dramatically. Hundreds of letters from all over the country had told Ken and Roberta that the games they were making were important to people. Even Apple co-founder Steve Wozniak, whom Ken admired, sent them a letter and told them what a delight it was to see their games run on the Apple II.
In the early 80s, a large number of companies fought to become the leaders in the new and very attractive market of home computing. Venture capitalists had seized some control of Sierra On-Line after lending Sierra On-Line money for the development of early games. They wanted the company to turn their attention towards cartridge-based computers, and invested lots of venture capital on the development of software for systems such as the Atari VCS, Coleco Adam and VIC-20. These investments did not pan out, and in mid-1984 Sierra On-Line was on the brink of bankruptcy. Stuck with piles of cartridges for millions of dollars that no one wanted to buy, the history of Sierra On-Line nearly ended.
In the spirit of Wizard and the Princess, Roberta created a story based on classic fairy-tale elements where a knight would have to save a kingdom in distress by recovering three lost treasures. Her game concept included animated color graphics, a pseudo 3D-perspective where you could see the main character on the screen and be able to control his movements with the arrow keys on the keyboard, a much more competent text parser that would understand advanced commands from the player and music playing in the background through the PCjr sound hardware. The character would be able to move in front of or between objects on the screen, his graphics covering or being covered by these objects accordingly. The game was going to look and feel just like an animated cartoon that the player could control. A game like this had never been made before, and some people didn’t believe it was possible to turn Roberta's concept into a game.
In order to bring together all of the graphics, text, and logic code for Roberta’s new game, Sierra On-Line needed new programming tools. A complete adventure game development system, called AGI (short for Adventure Game Interpreter), was developed. All of the text, graphics, sound, and game logic would be designed to run through this interpreter. It would be easy to write other games for the same interpreter in the same way, and if Sierra On-Line wanted to port AGI games to other systems, they only needed an AGI interpreter for the new system that would run the games. Few changes to the game data were needed.
In the summer of 1984, King's Quest was released. King’s Quest was successful on the IBM PCjr (nicknamed "peanut") and helped keep the company alive, However the PCjr itself was not well received. It was very incompatible with the standard IBM PC, and its “chiclet” keyboard was not working very well and could not be called user-friendly. The introduction of the PCjr was also overshadowed by the release of the Apple Macintosh at about the same time. The PCjr was doomed for failure, and it spelled a new disaster for Sierra On-Line.
Coincidence saved the company, as the Tandy Corporation introduced the Tandy 1000 in 1985, just a few weeks after IBM finally stopped production of the PCjr. It was compatible with the PCjr (although not marketed as such because of its bad reputation), and with MS-DOS, so King’s Quest ran without modification on it. With the Tandy 1000's dominant position in the home computer market, sales of King’s Quest remained strong. Sierra On-Line started earning money again and was soon back on track.
The second half of the 80s was a time of great growth and success for Sierra On-Line. In this period, the company changed its logo.
The games themselves were outstanding for the day, with stereo soundtracks and incredible graphics. Ken soon realized that it was the Japanese that could teach him, not vice versa. Instead of selling several games, Ken arranged for Sierra to acquire the rights to port and publish the platform shooter Thexder in the U.S. from Game Arts, the Japanese publisher. Thexder was a phenomenal success when it reached the shelves just before Christmas 1986. It became Sierra's bestselling game in 1987 and cooperation with Japanese publishers continued throughout the late 80s.
Al Lowe scrapped the original game material almost totally and came up with a main character called Larry Laffer, a nerdy loser in his forties who had lived with his mother until just recently. With a receding hairline and a 1970's leisure suit in white polyester, earning him the nickname Leisure Suit Larry, this hero comes to the city of Lost Wages hoping to lose his virginity. The game had funny answers for almost every single thing the player could think of writing.
Leisure Suit Larry in the Land of the Lounge Lizards was a great hit (although not instantly), and it even won the Software Publishers Association's "Best Adventure Game" award of 1987. A long series of Leisure Suit Larry games would follow in the coming years and become the second best selling game series of Sierra On-Line after King's Quest. Leisure Suit Larry in the Land of the Lounge Lizards may have been the most pirated game of the late 80s. Sierra On-Line claims to have sold more hint books than copies of the game itself.
First of all, the graphic capabilities were now improved, as standard 320×200 EGA graphics was introduced. It doubled the resolution of the old AGI system, enabling much more detailed graphics. The old vector graphic techniques for background pictures used to save disk/memory space in the AGI games was brought along to the new interpreter, but now offered some improvements as well.
The AGI system used dithering of pixels to approximate the original 160×200 16-color graphics when it ran on a computer capable only of showing 320×200 4-color CGA graphics. Now this idea was brought along to the 320×200 16-color EGA-supporting SCI, allowing game artists to mix all 16 colors with each other in patterns to create even better looking graphics.
The SCI system also introduced mouse support, though both keyboard and joystick control were still supported as well. An improved menu system enhanced the look and feel of a game, and whenever the user pressed a character key, a command window automatically popped up, freezing the game until the user had finished the command, unlike the AGI system that always displayed a command prompt at the bottom of the screen and never froze up the game when you typed in a command. So now the user could write commands without hurry even when the character on screen was in immediate danger, a very convenient feature. The SCI system also showed the current score and the name of the game at the top of the screen at all times.
The SCI system furthermore improved scripting technology by supporting object-oriented scripting code. Similar to C++ or Java programming, game programmers could now write script classes for basic handling of things like moving creatures in the game and then re-use that code, adding/modifying only the parts separating different creatures.
But the most revolutionary thing about SCI was that it introduced support for extended sound hardware on the PC. Other popular computer platforms such as the Atari and the Amiga already had good sound, but the PC still only had the dreaded single-voice PC Speaker that was not really intended for music at all, although bravely used by Sierra On-Line and other computer game developers nonetheless. When the first professional sound devices compatible with the PC hardware, such as the AdLib and the Roland MT-32, were introduced, very few people believed in them. But Ken Williams foresaw what others had not realized: This technology would become big one day! He worked hard to make sure that the company would promote these cards and make people buy them.
All in all, over $400,000 was spent on developing the technical improvements in SCI.
The SCI system became the base for many adventure games produced by Sierra On-Line after 1988. It was used for development of both Police Quest II and Leisure Suit Larry II, and in early 1989 for Space Quest III.
Roberta took another pause from the King’s Quest series in 1989 to write The Colonel's Bequest: A Laura Bow Mystery, a game taking place in the 20s and with a story not completely unlike the one of Mystery House.
In 1989, yet another successful Sierra On-Line game series was born with the release of Quest for Glory I: So You Want to be a Hero, written by Lori Ann Cole. This was not entirely an adventure game, as role-playing was also present. It was the first Adventure/RPG hybrid ever made. The game was originally called Hero’s Quest, but this resulted in copyright problems as people could confuse it with the well known Milton Bradley board game HeroQuest, so Sierra On-Line had to change the name.
Al Lowe also made the third episode of the Leisure Suit Larry series in 1989, a game that ended up in the back lot of Sierra On-Line itself.
The last game to be made in the AGI system was Manhunter 2: San Francisco in 1989. After that, Sierra solely used the superior SCI system for all their adventure games. The Manhunter series did not become successful enough for more sequels to get done.
In the same year, Sierra’s sister-company Infocom, who only made old-style text adventure games was shut down. People did not buy enough text adventures anymore, as Sierra On-Line and others created more graphical adventure games.
1989 marked another major development that would change the look and feel of graphic adventure games forever. Aware of the new VGA video cards, capable of 256 colors and the CD-ROM delivery system on the horizon, Ken and Roberta realized they had an opportunity to raise the bar on computer gaming for everyone. While making a few phone calls to check out the possibilities of hiring some professional animators, they came across a director/designer named Bill Davis, who was working in animated television commercials for studio Kurtz & Friends. Sierra hired Bill Davis as their first VP of Development/Creative Director. Bill Davis oversaw the development of a new VGA version of Roberta's Mixed-Up Mother Goose, an early CD-Rom title on the Fujitsu's FM Townes machine.
A new version of Mixed-Up Mother Goose was also released this year. After two years in development, it was released on CD-ROM and had digitized speech instead of text. It was the first true multimedia adventure game to be released on CD-ROM. Developing was not an easy process. The speed of CD-ROM drives at the time made it impossible to find speech data on the disk without a noticeable delay whenever a character in the game was going to say something. Synchronizing the lips of the characters to the sound was also impossible. Of course, few people had CD-ROM players at the time, but the ones who did got to experience something truly amazing. It won the Software Publishers Association's 1990 Best Early Education Award. Ken Williams was in fact one of the nominees for the Lifetime Achievement Award at the same ceremony, but he lost it to Steve Wozniak, the legendary co-founder of Apple Computer. "I can't imagine a better guy to lose to than Steve. He's always been one of my major inspirations in this business." said Ken. (A quote from Sierra News Magazine.)
In 1990, to celebrate the company’s tenth anniversary, Sierra On-Line decided to make new, enhanced versions of the first games in their five most popular game franchises: King's Quest, Space Quest, Leisure Suit Larry, Police Quest and Quest for Glory, using the new SCI system. As Roberta Williams had begun work on the next King's Quest game, newly hired game designer Josh Mandel was assigned to the project of remaking the first King's Quest game. Roberta kept an eye on the project, but Josh still had pretty free hands in designing the game.
The releases of the SCI versions of Sierra's older games in 1990–91 did not have financial success.
In 1990, after a deep discussion with Bill Gates, Ken Williams decided to change Sierra’s corporate strategy: From now on, Sierra would be 1/3 Perennial Series (such as King’s Quest, Space Quest, etc.) 1/3 Educational titles and 1/3 Productivity software. In order to meet this goal, Sierra would have to begin purchasing other companies in order to create a more diverse product line.
There were many problems to solve if this was going to work. They installed 32 new telephone lines in the building, bought a bunch of 2400 baud modems and connected them all together. The system proved difficult to implement, so Al wrote a simple checkers game to test its basic features. It worked, and he went on and made a backgammon and a chess game while Jeff and Matt continued working on the system, and by 1991 the project was up and running.
Due to the lack of technology at the time, the multiplayer game was ultimately dropped. (Because of this, there never was a Leisure Suit Larry 4; the series continued with Leisure Suit Larry 5). The company decided to continue with a lower scale version of the multiplayer gaming using smaller, more simplistic games. Margaret Lowe, Al Lowe's wife, created the name in which it was referred to as Constant Companion. It was later renamed The Sierra Network or TSN. A monthly fee was implemented allowing users to connect to TSN to play in multiplayer games against other users. The TSN system is considered to have been advanced for its time.
Modem restraints, lack of interest, and slow growth contributed to TSN's downfall. An estimated ten million dollars was being lost per year when TSN was sold to AT&T; TSN continued a downward spiral being sold to America On-Line, and then consequently, it was dropped
By 1991 the company had over 300 employees.
A CD-ROM version of King's Quest V was released in 1991. The voice acting was mostly done by Sierra employees. It was the second Sierra game to be released on a CD.
Sierra and Brøderbund signed a letter of intent to merge but that agreement was terminated in April 1991 when Sierra and Broderbund came to a disagreement upon what the structure and management of the combined company would be after the merger.
Brøderbund would go on to publish Myst in 1993, which would end up becoming the highest selling computer game of all time, a title which it would hold for eleven years, until The Sims exceeded its sales.
In February 1992, Ken Williams met with John Carmack and John Romero, the founders and heads of id Software and offered to buy id Software for $2.5 million. The two developers turned Ken down, and id Software went on to release Wolfenstein 3D and later Doom and Quake, games that defined and brought first person shooter gaming to the mainstream market, a genre that continues to be popular to this day and led to the decline in popularity of Adventure Games starting in 1996.
The decision was made to move north, to Bellevue, Washington. The Seattle area was much better suited to run the company from and with companies such as Microsoft based nearby, finding people to hire was not a problem. With management and some of the development teams moved to Seattle, the company could continue growing and still keep developing games in Oakhurst.
The company was now made out of five separate, and largely autonomous development divisions: Sierra Publishing (Oakhurst), Sierra Northwest (Bellevue), Dynamix, Bright Star Technologies and Coktel Vision, with each group working separately on product development but sharing manufacturing, distribution and sales resources, overseen by the management of Sierra and the main Sierra organization (Sierra Northwest). This strategy created a large and diverse but well managed company with various brands that brought the whole company more success and Sierra only continued to grow as time went on.
1995 was a great financial year for the company. With $83.4 million in sales from its software-publishing business, earnings were improved by 19 percent, bringing a net income of $11.9 million to the company. This caused the stock price to jump from the 1994 value of $18 to $26.
Michael Brochu, a longtime executive and advisor at Sierra was named the company President and COO by CEO and Chairman Ken Williams. Brochu was responsible for the day-to-day management of the company while Williams would focus on product development.
In February 1995, Sierra and Nintendo of America Inc. signed an agreement in which Sierra would produce titles for the then upcoming Nintendo 64 console entertainment system. No titles, however, were produced due to Nintendo’s legal troubles but the advertisement of the move brought Sierra many new fans in console gaming.
In June 1995, Sierra and Pioneer Electric Corp. signed an agreement to create a joint venture which would develop, publish, manufacture and market entertainment software for the lucrative Japanese software market. This joint venture created a new company called Sierra Venture. With Sierra and Pioneer investing over $12 million, Sierra Pioneer immediately manufactured and shipped over twenty of Sierra’s most popular products to Japan and over the next few years Sierra Pioneer would create new entertainment and educational titles for the Japanese market, which would give Sierra a base of operations in the Asian market.
This project had been in Roberta's mind for several years and was something dramatically different from the family-friendly King's Quest series. This was a gruesome horror story in the spirit of Edgar Allan Poe and Stephen King and would be very unsuitable for children.
At the time of its release in late 1995 the anticipation of the game was extremely high. However, the game turned out to be a big disappointment to a lot of people, and computer game reviewers complained about bad acting, boring video sequences and a gameplay that was much too easy and linear. Nevertheless almost a million copies were sold when the game was first released in August 1995, making it the best-selling Sierra adventure game ever.
Working with TSR, Inc., Sierra was granted the license to create computer games based on TSR’s popular Dungeons & Dragons role-playing system. Sierra entrusted its new subsidiary Synergistic Software to create Birthright - The Gorgon's Alliance based on the Birthright campaign setting.
In June 1996, Sierra introduced a new product line, SierraOriginals, through Bellevue, which would re-release the original versions of many of Sierra’s hit titles such as King's Quest VI, Gabriel Knight and Red Baron at value prices.
In October 1996, Sierra introduced a new creative group called k.a.a. Based out of Dynamix’s studios in Oregon; k.a.a. would specialize in the popular side-scrolling gritty 3rd person action genre and would be run by Dynamix's Jeff Tunnell. The studio produced two titles, Hunter Hunted and Cybergladiators. Both games were minor hits, and there were plans for k.a.a. to produce eight more action titles by 1998, but these plans were eventually scrapped and the group was disbanded in 1997.
December 1996 saw the release of The Realm Online, a massively multiplayer online game similar to Neverwinter Nights. It had over 25,000 users at its peak. Ken Williams acted as Executive Producer on the Realm from its release until late 1998.
With such an offer, the decision was in the hands of the shareholders and not the management, and the company was sold to CUC on July 24, 1996 along with leading educational software developer and publisher Davidson & Associates Inc. Other interactive entertainment companies to be acquired within the year were Gryphon Software and Knowledge Adventure Inc.
The transfer of control to CUC was a matter of much discussion as they had no previous experience in the interactive entertainment business. At the time though, Sierra thought that by consolidation with their new sister-companies they would be able to grow even faster than before.
Immediately after the sale closed, Ken Williams stepped down as CEO of Sierra and Michael Brochu, Sierra's President and COO, assumed control of the company. Ken stayed with the software division as a Vice President of CUC so that he could provide strategic guidance to Sierra and began to work on CUC's online product distributor, NetMarket
Meanwhile, during the tumult of the CUC sale, Sierra continued to make acquisitions of smaller firms. In early 1996, the company called Synergistic Software, famous for being one of the earliest third party developers for the Apple II computer, and also famous for their line of fantasy and sports entertainment software. The sports area was further expanded upon in April by the acquisition of Headgate, a developer of golf products.
In September 1996, CUC announced plans to consolidate some of the functions of its game companies into a single company called CUC Software Inc., headquartered in Torrance, California. Davidson & Associates became a publisher for its studios and Knowledge Adventure’s products; Blizzard became an entirely separate CUC Software division. CUC Software would consolidate the manufacturing, distribution and sales resources of all of its divisions that would come to include Sierra, Davidson, Blizzard, Knowledge Adventure, and Gryphon Software. CUC Software was initially headed by Bob Davidson, who acted as CEO.
On January 21, 1997, CUC announced changes in CUC Software’s senior management. Bob Davidson stepped down as CEO of CUC Software, and his wife Janice Davidson stepped down as President of Davidson & Associates. Bob Davidson would remain a vice chairman and member of the board of directors of CUC International Inc. and Jan Davidson would remain as an educational software advisor to Davidson & Associates and would ease the transition. Christopher McLeod was announced as the new CEO of CUC Software, directly overseeing the management of Sierra and Blizzard Entertainment and would act as the COO of Davidson & Associates. Michael Brochu, Sierra’s president and Allen Adham, Blizzard’s President, would report directly to McLeod.
On April 3, 1997, Sierra announced that the staff of the old company headquarters in Oakhurst would be reduced by almost 50%, relocating about 90 people to CUC Software’s facilities in Torrance. Most of the people relocated were in Sierra’s “operations” departments which included disk duplication, warehousing and manufacturing. The relocations at the Oakhurst facilities were part of the consolidation of Sierra as a part of CUC Software.
Ken Williams left CUC completely in mid 1997 after NetMarket opened. That November, together with former Sierra Executive Vice President of Product Development Jerry Bowerman, he founded WorldStream Communications, an Internet-based company developing online communications software.
In October 24, 1997, Mike Brochu announced his resignation as President and COO of Sierra and officially left Sierra on October 31st; on November 5 Chris McLeod, CEO of CUC Software, responded to his departure by restructuring Sierra and breaking the business into three units. Three former vice presidents - Bill Moore, Scott Lynch, and Randy Dersham - were given the title Senior Vice President and put in charge of the new units.
Moore was made responsible for Sierra's Home Production line, Berkeley Systems, and all on-line gaming products; Lynch was put in charge of Sierra Northwest (Bellevue), the former headquarters at Oakhurst, and Impressions Games; Dursham was made responsible for all sports-related projects including Papyrus and Front Page Sports (Synergistic Software) products.
A Sierra insider at the time said the structure would address an approval process that was perceived internally to be slow. Insofar as CUC Software, Sierra's owner, having exerted a heavy hand in the reorg process, this person discounted any suggestion of that: "They leave us alone and let us market products as we want. Chris McLeod is very involved but he knows we're the experts."
With over 2,000 employees around the globe, Cendant Software consolidated the sales, R&D, distribution, finance, accounting and management of Sierra, Davidson, Blizzard and Knowledge Adventure. Operated out of Torrance, California, Cendant Software was headed by Chris McLeod with Sierra’s, Blizzard’s, Davidson’s and Knowledge Adventure’s CEOs acting as subordinates.
Around this time, Sierra also began to change character into more of a publisher than a developer of games. This was just one example of a trend in the business, where most of the big computer game companies of old went in the same direction, as this was a time Sierra was growing at its fastest.
A new company logotype, for the first time without the Half Dome silhouette in it, was used for the company and all of its sub-brands.
In May 1998, Sierra Publishing, the Sierra division still working at the original company headquarters in Oakhurst, changed its name to Yosemite Entertainment. While now only one of many parts within Sierra, this core group of well over 100 employees were in most cases the very same people that had been responsible for Sierra's huge success throughout the 80s and early 90s. Sierra FX, a sixth sub-brand, was formed for this development studio to release their games under.
In June 12, 1998, Sierra announced the appointment of David Grenewetzki as their new president and CEO. Grenewetzki had a solid experience in computer software company management from previous appointments at many companies, including Palladium Interactive Inc. and Accolade Inc. and promised to work hard to make sure that the company would be able to meet the future challenges of new platforms, product categories and technologies.
On June 3, 1998, WorldStream Communications announced the launch of TalkSpot, an online radio station featuring well-known talk show hosts and a wide range of quality programs on three live channels. One covered daily news and current events, one was for general issues affecting people's lives and one was for sports only. Offered as a free consumer service, TalkSpot radio could do much more than traditional radio by offering live chat, streaming pictures and many other things to the listeners on its website.
During the last few years, traditional adventure games had gone from one of the main genres to a relatively unprofitable business. Production costs were high and the sales could not match the ones of First Person Shooters and the increasingly popular RPGs. This caused fewer and fewer adventure games to be produced by Sierra. In 1998, Yosemite Entertainment released Quest for Glory V: Dragon Fire as the conclusion of the series, not planning any more sequels. The game was originally intended to feature an Internet multiplayer feature, but time limitations forced the game to be released without it. Sierra promised that a multiplayer edition of the game was to be released later.
After finishing Phantasmagoria, Roberta Williams, together with Mark Seibert, had worked on the next installment in the King's Quest series. The rising popularity of 3D graphics and action games resulted in a game design dramatically different than anything seen before in a King's Quest game. Taking place in a true 3D environment, King's Quest: Mask of Eternity featured action and RPG elements mixed with traditional adventure puzzles. The game took four years to complete, much longer than any previous game in the series and went through many changes during its long development. It was aimed at the average gamer rather than the die-hard adventure fan, and was the first in the series to feature a player character who was not a member of the royal family of Daventry—indeed, the royals are hardly present in the game at all. Although many old fans of the series were greatly disappointed by this approach, the strategy proved successful and game sales were quite high when it was released for Christmas 1998. However, the relative success of the game still could not change the common opinion that adventure gaming was a dead genre, and the new game design did not revolutionize the genre as Roberta was hoping it would do.
In March 1998, Cendant had reported a 1997 net income of $55.4 million in March 1998. However, the real 1997 result was a net loss of $217.2 million. As irregularities in the books of Cendant were discovered in early 1998, an audit committee set up by Cendant's Board of Directors launched an investigation and discovered that the former management team of CUC, including its top executives Walter Forbes and Kirk Shelton, had been fraudulently preparing false business statements for several years so the company could meet the earning expectations of Wall Street analysts. It was made clear that HFS had not played any part in this fraud scandal.
The irregularities were in the area of several hundred million dollars and when the news was announced and the real numbers revealed in the end of September, the Cendant stock instantly plummeted to about one fourth of its former value. As a result, the company was sued by its shareholders and the former CUC management team was terminated.
In March 2001, Forbes and Shelton were indicted by a federal grand jury and sued by the Securities and Exchange Commission, accused of directing the massive accounting fraud that ultimately cost the company and investors billions of dollars. Sierra and Davidson were among the many Cendant subsidiaries that had been used in the irregular bookings and Cendant had already announced its intention to sell off its entire computer entertainment division when the news of the accounting fraud came. Sierra was one of many companies that suffered great losses because of this affair even though it had been totally out of the management’s hands. Many of its employees lost their pensions, their net worth and even their jobs. The following years would be filled with aggressive endeavors to restore the profitability of the company.
On November 20, 1998, Cendant announced the sale of its entire consumer software division to Paris-based Havas S.A., France's largest media company. Havas, in turn, was a newly acquired business unit of Vivendi S.A., a huge water utility conglomerate with more than 220,000 employees, expanding into the media and telecommunications business. With this sale, Sierra became a part of Havas Interactive, the interactive entertainment division of the company.
But the shutdown that received the most attention was that of Yosemite Entertainment. With the exception of the warehouse and distribution department, the entire studio was shut down. This was the original Sierra headquarters and the birthplace of all the classic games that had made it such a successful company. Many of the people behind these games still worked there and were now informed that they had lost their jobs. About 135 people at Yosemite were fired. Yosemite Entertainment was in the middle of developing the highly awaited space combat simulator Babylon 5, the Lord of the Rings-based online multiplayer roleplaying game Middle Earth, the tactical simulation game Navy SEALs and a multiplayer add-on to Quest for Glory V.
40 people, critical to the development of Babylon 5 and Middle Earth (the other projects were dropped) were offered to relocate to the company headquarters in Bellevue and continue with the development, and eventually about 30 people moved from Oakhurst to Seattle. The shutdown of Yosemite Entertainment was a major blow to the small mountain community and emergency actions were taken to help all the people finding new jobs. Former Sierra employee William Shockley created a discussion forum for former Sierra employees at www.roboto.com and Ken Williams sent them all a letter, telling them how sad he and Roberta felt for them and what had come of the company they founded.
But the bad news did not even end there. At the same time, legendary game designers Al Lowe and Scott Murphy were fired. Al had just started work on Leisure Suit Larry 8, planned to feature 3D-animated characters. Scott Murphy was involved in a Space Quest 7 project that originally looked very promising, but that had later started facing serious problems when Sierra's management wanted it to be a multiplayer adventure game, a design that had been unsuccessfully attempted before with Leisure Suit Larry 4 and was doomed to fail this time as well. This was a result of the common opinion that adventure games were a dead and unprofitable genre at the time, and by firing two of the most well-known game designers in the industry, Sierra made it perfectly clear that they were not interested in any more Leisure Suit Larry or Space Quest adventure games, at least not as long as they were less profitable than other genres.
The closing of Yosemite Entertainment and all the other changes at Sierra left a lot of people upset and angry at their new management and business strategy. The date February 22, 1999 soon became known as "Black Monday" (or "Chainsaw Monday" as Scott Murphy named it) and the events gathered a huge Internet community of Sierra fans from all over the world, sharing their feelings and thoughts about the reorganization with each other. To many fans and former employees, Black Monday marked the death of the Sierra of old.
Layoffs continued on March 1, when Sierra fired 30 employees at the previously unaffected Dynamix, 15% of their entire workforce.
On March 6, Ken Williams, together with his wife Roberta and game designers Al Lowe and Scott Murphy appeared on Ken's online radio station TalkSpot in a nearly two hour live show called The Sierra Reunion, a real treat for all Sierra fans. During the show they shared their thoughts about the past, present and future of Sierra. A lot of people called in to the show, including a significant number of famous old-time Sierra employees.
In June 1999, Ken Williams shut down TalkSpot and laid off its employees. He did this because venture capitalist Rich Shapero of Crosspoint Venture Partners had convinced him that shutting down TalkSpot and instead focusing on providing the technology behind it to other companies would be a more profitable affair. Early in December the same year, WorldStream unveiled its new technology, designed to broadcast things such as teleconferences, concerts, product presentations and sales events. They offered a program called eComm1, a national network of servers and a mobile Plug-and-Play broadcast setup called Studio in a Box to the customers.
If King's Quest: Mask of Eternity did not revolutionize its genre, a game that did was Half-Life. Eventually released in 1998, two years after Sierra and Valve’s agreement, Half-Life was a new kind of first-person shooter, featuring major 3D graphical breakthroughs, and a more intricate storyline than other games. The game not only received great reviews and over 50 Game of the Year awards, but also had sensational sales and spawned a huge community of online players and modifiers of the game engine.
Valve did not return to Sierra for the sequel, Half-Life 2. Until August 2005, it was distributed by Sierra's parent company, Vivendi, when Valve decided to distribute their games themselves.
A bittersweet moment for adventure game fans was the release of Gabriel Knight 3, on November 3, 1999; happy, because this was a long-awaited game that was embraced by both fans of the series and game critics and reviewers; sad, because Sierra also announced that this was going to be their last adventure game for now. With their new business strategy, it would probably have been canceled too, if it had not been in production for such a long while and if not so much money had been spent on the development already. The only thing that would make Sierra return to making adventure games would be a change in popularity for the genre.
Fortunately, things changed for the better in Oakhurst when UK-based games developer and publisher Codemasters, in an effort to establish themselves in the United States, announced that they would launch a new development studio in Oakhurst, using the old Sierra facilities and many of the old Yosemite Entertainment staff in mid-September 1999. In early October they announced that they would take over management and maintenance of the online RPG The Realm and that they would pick up and complete the previously canceled Navy SEALs. They also reported that they had obtained the rights to continue using the name Yosemite Entertainment for the development house.
This reorganization resulted in even more layoffs, eliminating 105 additional jobs and a number of games in production, including Desert Fighter and Pro Pilot Paradise from Dynamix, Babylon 5, the much awaited game started at Yosemite Entertainment and Orcs: Revenge, a Berkeley Systems title. This was announced on September 21, 1999.
Ironically, this reorganization caused all of the former Oakhurst employees who had opted to relocate to Seattle and continued working for Sierra to be laid off, when both the Babylon 5 and Middle Earth projects were shut down. Fortunately for these people, they had negotiated for good severance packages in case this would happen.
These final cuts eliminated most of Sierra’s prominent development teams and projects, and so 1999 proved to be the last year that Sierra developed any of its major titles in-house. After 1999, Sierra almost entirely ceased to be a developer of games, and as time went on, instead became a publisher of games for independent developers.
Sierra’s big games, such as the SWAT series, would be developed by third party companies, while releases of lesser importance, such as the Tribes, The Incredible Machine and NASCAR Racing series would be handled in house at Bellevue and by Sierra’s studios at Impressions, Papyrus and Dynamix. Titles such as Print Artist, Hallmark Cards, and Hoyle would also be handled through Bellevue under Sierra’s Home Productivity brand.
At the end of June 2000, a strategic business alliance between Vivendi, Seagram and Canal+ was announced and Vivendi Universal, a leading global media and communications company, was formed after the merger with Seagram, the parent company of Universal, which included Universal Studios and the newly formed Universal Music Group. Havas S.A. was renamed Vivendi Universal Publishing and became the publishing division of the new group, divided into five groups: games, education, literature, health and information. The games division included Sierra On-Line, as well as Blizzard Entertainment and Universal Interactive Studios.
David Grenewetski stepped down as President and CEO in early 2001, and on May 9, 2001, Sierra On-Line announced the appointment of Thomas K. Hernquist as their new President and CEO. Michael A. Ryder also joined Sierra as COO and Senior Vice President of Product Development. Hernquist did not stay for long at Sierra though, and Ryder soon took over as the company president.
In early August the same year, WorldStream Communications was one of the many victims of the dotcom crash, and the company was forced to shut down and laid off its 87 employees.
The costs of running the software division, which at this time was largely unprofitable, had become too much to handle for Vivendi and senior officials at Vivendi Universal publishing decided to economically downsize, and a massive reorganization of Sierra was then undertaken:
On August 14, 2001 Sierra On-Line let the axe fall on Dynamix for the final time and closed the development studio for good. 97 people lost their jobs. Dynamix was viewed by many Sierra fans as the very last remaining piece of the company with a meaningful connection to its legendary past, and with the end of their 17-year history in the business, Sierra On-Line was considered to have taken the final step away from its roots. Dynamix developed a lot of memorable titles for Sierra, but was frequently in financing troubles. In the more aggressive business climate Sierra had entered after the CUC fraud, there was simply no place for unprofitable development studios anymore.
148 more people, at the main offices in Bellevue, lost their jobs on August 15, 2001. Many of these people were employed in Sierra’s administrative, marketing and legal divisions, and those functions, along with Sierra’s customer service, and technical support divisions, would now be consolidated and absorbed by Vivendi Universal Publishing and handled by Vivendi employees in Los Angeles. 20 further employees were also transferred to Vivendi’s headquarters.
Sierra also lost its online sales division, which would now become part of Vivendi Universal Publishing’s website. Sierra sold off most of the Sierra Home division and largely discontinued this brand and group. All of it’s titles were discontinued with the exception of Print Artist. These cuts and consolidations were said to be necessary in order to create synergy between Sierra and Vivendi’s other interactive entertainment companies and to create a more efficient operating model for Sierra which would be similar to the organization of Blizzard Entertainment (which was unaffected by these cuts)
In total, 245 people lost their jobs between the cuts at Bellevue and the Dynamix shutdown, and with these cuts Sierra lost more than 40% of its entire workforce.
Layoffs continued on November 9, 2001. Sierra laid off more than 39 employees at the headquarters in Bellevue, which included Bellevue’s entertainment teams. These further cuts left 200 people in the Bellevue offices.
Sierra began to lose its brand recognition after this, and within the Vivendi organization it was known as “Vivendi Universal Games Northwest.” However, Mike Ryder, as president, was committed to restoring Sierra to its former glory and showed a great deal of interest in reigniting the series that made Sierra what it was such as King’s Quest, Space Quest, Leisure Suit Larry and others, and even met with some of the original designers of these series.
In mid-November, Sierra On-Line changed the design of their logo for the fifth time. To the delight of many old fans it featured the old Half Dome picture, even though the company really had no connection to Yosemite anymore. Still, fans of the old Sierra organization saw this as a sign that there might still be a chance, however small, that they would eventually return to their adventure gaming roots.
Mike Ryder, as president, was committed to restoring Sierra to its former glory and showed a great deal of interest in reigniting the series that made Sierra what it was such as King’s Quest, Space Quest, Leisure Suit Larry, and others, and even met with some of the original designers of these series. He was determined to bring Sierra back to the top of the industry. Ultimately, Vivendi officials wanted Sierra to stay right where it was, and Ryder was sacked.
In 2002, to the surprise of many fans, Sierra, working with High Voltage Software, announced the development of a new chapter in the Leisure Suit Larry franchise, titled Leisure Suit Larry: Magna Cum Laude. Many fans doubted that Sierra, which was now largely only a brand name of Vivendi Universal Games, would be able to produce a legitimate sequel to the beloved series, especially after they learned that the series’ original creator Al Lowe was not involved.
By now, Sierra had all but ceased to operate as a developer. Bellevue still developed products such as Print Artist and Hoyle Card Games and Sierra’s two remaining divisions, Papyrus and Impressions Games, still developed many of their perennial titles such as Caesar III and NASCAR Racing, but the work of developing was costly and Sierra’s in-house products simply weren’t bestsellers.
Sierra still acquired and published many new franchises, but like Sierra’s other major products, these titles were developed by external, independent developers such as Massive Entertainment and High Voltage Software. Run through Bellevue, Sierra was a major publisher for independent companies.
In late 2003, Mike Ryder was replaced by a man named Kelly Zmak, who was now put in charge of what was left of Sierra as General Manager for the offices in Bellevue and as Vice President of the rest of the company.
Later that year former CEO and Chairman Ken Williams opened a Sierra fansite through which he talked directly to fans, and still operates the site to this day. During 2003, he had approached Mike Ryder, hoping to advise the chief of the company on the company’s strategic direction, but he was bitterly ignored by Sierra officials. As Blizzard Entertainment’s star began to rise, Sierra’s began to fall and Vivendi officials began to wonder if they actually needed Sierra.
The newly rechristened Sierra Entertainment continued to develop mostly unsuccessful interactive entertainment products, due to lack of financial investment on Vivendi’s part and rushed releases, again due to Vivendi. However, its hit Homeworld 2 only cemented Sierra’s reputation as a respectable publisher, and with over 300 employees, Sierra, though only a shadow of its former glory, was still a major player in the gaming industry, with its publishing arm responsible for acclaimed titles, though Sierra was about to be struck a fatal blow.
Even with quite a few recent successes, Sierra’s long history came to a close with a few short strokes in 2004, Sierra’s 25th year of business. Cost-cutting measures were taken, due to parent company Vivendi’s financial troubles, and due to Sierra’s lack of profitability as a working developer: Impressions Games and the Papyrus Design Group were shut down in the spring, and about 50 people lost their jobs in those cuts; 180 Sierra-related positions were eliminated at Vivendi’s Los Angeles offices; and finally in June 2004, VU Games laid off most of Sierra’s final employees at Bellevue, which cost over 100 people their jobs, and dispersed Sierra’s work to other VU Games divisions. Other titles, such as Print Artist, were discontinued totally; The Hoyle franchise was sold to an independent developer. In total, 350 people lost their jobs. The lights went out at the offices in Bellevue, creator of hundreds of memorable Sierra titles and home of so many memories for all of Sierra’s fans, for the last in time in August 2004. Vivendi announced that the Sierra brand name and logotype would still be used on VU Games products, run out of VU Games headquarters in Los Angeles.
Starting in 2005, Vivendi undertook a turnaround plan in order to bring back profitability to the flailing games division. This turnaround plan included the revival and revitalization of Sierra with new management, studios and IP. Sierra's partnerships with its third party developers were also rearchitectured.
Several studios including Massive Entertainment, High Moon Studios, Radical Entertainment and Swordfish Studios, were acquired and integrated into Sierra throughout 2005 and 2006 to give the company a new retinue of in-house developers. Creative licenses from other Vivendi divisions and from companies partnered with Vivendi were granted to Sierra, and copyright of several notable intellectual properties such as Crash Bandicoot, Spyro the Dragon, 50 Cent: Bulletproof and Scarface were granted to Sierra.
Sierra continues to be operated through Vivendi Games’ headquarters in Los Angeles. The company is run by Martin Tremblay, who acts as the President of Sierra’s World Wide Studios and by Al Simone, who acts as Senior Vice President of Global Marketing. Sierra is home to four development studios: Massive Entertainment, High Moon Studios, Radical Entertainment and Swordfish Studios.
On the 9th of July 2008, the merge between Vivendi Games and Activision was complete. Around this time there were articles released stated that If a Sierra product does not meet Activision's requirements, "they won't likely be retained.. Althought some of Sierra's games such as Crash Bandicoot, Spyro The Dragon, and Prototype have been retained by Activision and will be published by them.
During October, Sierra made an announcement stated that they will close their forum servers on the 1st of November 2008. Most of Sierra's games will not have a forum anymore except for Crash Bandicoot, Spyro the Dragon, Prototype, and Ice Age 2 which will be moved to Activision's server.